Stocks Deliver Strong Returns Following Bear Markets

One of the very important factors needed for success with equity investing is the ability to stay invested during any market including bear markets. To put it another way, simply selling out when stocks crash 20% or more is a foolish idea.Investors who are unable to hold stocks when punishing market events occur should not bother venturing into stocks.

When stocks are mauled by the bear, like in 2008-09 with the Global Financial Crisis, it is critical to be patient and not sell out. Many investors who sold out at the peak of that crisis lost out big time. On the other hand, people who dived into stocks at the trough or held on to their stocks have earned excellent returns in the ensuing bull market that continues to roar ahead.

The following chart shows equity returns in various periods following bear markets since the 1960s:Click to enlarge

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For Informational Purposes Only.Information posted on this site do not constitute investment advice in any way to buy or sell a security. Do your own due diligence before making any investment decisions.